Osteoclasts are large myeloid-derived multinucleated cells primarily responsible for bone resorption. Dysregulation of osteoclast differentiation can result in net bone resorption and is key to the pathophysiology of rheumatoid arthritis, osteoporosis, and lytic bone metastasis. Thus, understanding the mechanism of osteoclast differentiation is of great therapeutic importance for nearly all forms of metabolic bone disease. Our long-term goals are 1) to elucidate a role of the newly described regulatory pathway in osteoclastogenesis and arthritic bone resorption and 2) to develop an effective and specific way to treat bone loss in RA. c-FMS, a receptor for M-CSF/ IL-34, transduces essential signals for the differentiation of osteoclasts and macrophages. Aberrant expression of c-FMS (or M-CSF) has been linked to exacerbation of diseases such as inflammatory arthritis and cancers. We have identified a novel regulatory pathway of c-FMS initiated by TACE (TNF-? converting enzyme). This pathway involves the coordinated, sequential cleavage of c-FMS by TACE, ?-secretase, and calpain, which results in the generation of intracellular domain cleavage fragments (referred to as FICD). Myeloid-specific TACE-deficient mice have high bone mass with decreased osteoclast numbers and ameliorate bone destruction in TNF-? induced arthritis in TNF transgenic (tg) mice. We found that FICD generation is critical for osteoclastogenesis, as enforced expression of FICD rescues the impaired osteoclastogenesis seen in TACE deficient cells. Thus, in addition to the well known role of c-FMS to activate conventional M-CSF signaling pathways as a surface receptor, c-FMS is also processed into the FICD that traffics into the nucleus, where it functions as a positive regulator of osteoclastogenesis. The existing paradigm is that shedding of c-FMS from the cell surface is a negative event related to loss of a signaling receptor. However, our study led us to discover that TACE-mediated shedding of c-FMS provides a positive signal for osteoclastogenesis. Here, we seek to build upon our novel findings to unravel the mechanisms by which the TACE/FICD axis regulates bone resorption, with a specific focus on inflammatory arthritis. Thus, we hypothesize that :1) TACE deficiency- mediated attenuation of arthritic bone resorption is, in part, due to lack of FICD, 2) Inhibition of the TACE/FICD axis ameliorates arthritic bone resorption, and 3) FICD targets the transcriptomic program in osteoclastic bone resorption. Our specific aims are 1) to investigate the underlying mechanisms behind how the TACE/FICD axis regulates pathological bone resorption in TNF-tg mice and 2) to elucidate the mechanism by which the TACE/FICD axis regulates osteoclastogenesis by identifying the direct pathways/targets of FICD. We anticipate that a better understanding of the diverse roles of this TACE/c- FMS/FICD pathway will advance our understanding of fundamental osteoclast biology, and targeting the TACE/FICD axis may provide new ways to attenuate bone resorption in inflammatory arthritis.